… projects economic growth at 4.49%
…expects NFEM exchange rate averaging at N1,400/$
… sees inflation decelerating to 12.94%
…external reserves projected to increase to $51.04bn
The Central Bank of Nigeria (CBN) has expressed optimism that 2026 could mark a turning point for the country’s economy, citing improved policy coordination and reform momentum as key factors.
According to the apex bank, the year 2026 presents a realistic opportunity to achieve macroeconomic stabilisation and lay the groundwork for sustainable growth.
Bullish on economic growth …
While CBN sees the year 2026 presenting a realistic window of opportunity for macroeconomic stabilisation, it expects Nigerian economy to continue expanding, with growth projected at 4.49 percent in 2026.
CBN said in its 2026 macroeconomic outlook for Nigeria that the growth projection is hinged on continued gains from broad-based structural reforms and a gradually easing monetary policy stance.
“These are expected to further improve the business environment, enhance investor confidence and support private-sector-led growth,” CBN said, adding that the growth momentum is also anticipated to be complemented by increased production and investments in the oil sector, supported by improved security surveillance, alongside gains from enhanced domestic refining capacity.
Read also: CBN sees FX reserves rising to $51bn in 2026 on market reforms
Inflation to moderate to an estimated average of 12.94 percent…
CBN also projects headline inflation to moderate to an estimated average of 12.94 percent in 2026, driven by declining food and premium motor spirit (PMS) prices.
The apex bank also said the growth in monetary aggregates in 2026 is expected to be influenced majorly by exchange rate movement, fiscal operations, the impact of election-related spending, and continued implementation of prudential measures.
Likewise, it expects the capital market to remain bullish in 2026, supported by the bank recapitalisation exercise, rising investor confidence and other policy measures aimed at fostering growth.
CBN is also optimistic about the fiscal outlook for 2026, saying it will be driven by sustained non-oil revenue collection and continued implementation of the Nigeria Tax Act, 2025, alongside other policy reforms.
The Federal Government retained revenue and expenditure are projected at N35.51 trillion and N47.64 trillion, respectively, resulting in a provisional deficit of N12.14 trillion (3.01 percent of GDP). Public debt as a percentage of GDP is projected at 34.68 percent by end-2026, compared with 33.98 percent as at June 2025, predicated on expected new borrowings.
External reserves projected to increase to $51.04 billion…
“The positive trend in the external position is expected to be sustained in 2026, supported by strong exports, steady remittances inflow, increased oil & gas output, improved domestic refining capacity and rising global demand from key trading partners.
“The current account surplus is expected to rise to $18.81 billion, while increased portfolio investment inflows and external borrowings are projected to keep the financial account in a net borrowing position of $10.15 billion,” CBN noted.
CBN also projects International Investment Position (IIP) to record a net borrowing position of $69.58 billion in 2026, “as attractive yields are anticipated to further boost capital inflows”. Likewise, the apex bank expects reforms in the foreign exchange (FX) market sustaining exchange rate stability, while external reserves is projected to increase to $51.04 billion.
Growth susceptible to several risks…
The growth projections are not without risk as CBN said the outlook for the domestic economy could be susceptible to several risks, noting that unanticipated headwinds may upturn the expected deceleration in inflation.
Accordingly, the apex bank noted that inflation projections could be derailed if fiscal expenditure rises disproportionately above the benchmark or if a sudden deterioration in global financial market condition triggers capital reversals that could rekindle exchange rate volatility.
“Growth prospects could be adversely affected if an unlikely reversal of the expected disinflation necessitates monetary tightening. Unfavourable climatic conditions and potential disruptions to crude oil production could also dampen projected output growth, impair budget implementation and weaken overall macroeconomic performance.
“In addition, unanticipated headwinds, such as continued geopolitical tensions and reescalation of protectionist trade policies could adversely affect the trade balance and exchange rate stability,” CBN said.
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Hedging against shocks…
In 2026, the Bank said it would sustain its commitment to balancing the objectives of price stability and supporting output growth, adding that appropriate policy instruments would also be deployed to attract foreign investment and consolidate the stability in the foreign exchange market.
Furthermore, the Bank said it would continue to enhance financial stability by deepening the operational integration of the GSI framework across all financial institutions, ensuring credit discipline, and strengthening cybersecurity regulations.
“To boost fiscal operations, there is a need to broaden the tax net and establish a more efficient and equitable tax regime, through the effective implementation of the Nigeria Tax Act, 2025, among other short-term priorities. Also, the fiscal authority should ensure that the debt strategy remains aligned with fiscal rules for debt sustainability,” CBN said.
